Alabama

FEMA makes no move to recover money sent to Mobile firm

View full size(Press-Register correspondent/Lyle Ratliff)Clearbrook Chief Executive Bruce Wagner (seen here on Oct. 12, 2005) said that FEMA closed out its contract account about a month ago without asking him to repay anything.WASHINGTON -- Three years after auditors urged the Federal Emergency Management Agency to recover up to $16.4 million from a Mobile company involved in hurricane-response work, the issue remains unresolved and, according to the company's president, no money has been repaid.

In a February 2007 report, the U.S. Department of Homeland Security's inspector general challenged payments to Clearbrook LLC, a water services company located on Azalea Road, based on "contractual deficiencies, excessive billings and questionable costs" in the course of housing and feeding relief workers at so-called base camps following Hurricanes Katrina and Rita.

FEMA has not attempted to recoup the money, but the matter "continues to be under review," according to Marty Metelko, a spokeswoman for the inspector general's office. The amount of time involved so far is not unusual, she said.

In an interview, Clearbrook Chief Executive Bruce Wagner said that FEMA closed out the contract account about a month ago without asking him to repay anything.

"I think by now everyone that hasn't forgot about this knows a lot of taxpayers' money was spent investigating an innocent company and the return on that investigative investment was nothing," he added in a follow-up e-mail.

Homeland Security is FEMA's parent agency; the inspector general is a kind of internal watchdog.

The contract, originally worth $50 million, was awarded a week after Katrina slammed the Gulf Coast in August 2005. It was the start of a run of FEMA business that Clearbrook, which had little previous federal contracting experience, won as the lead player in a consortium of disaster response companies in the wake of Katrina and Rita.

The $16.4 million in disputed payments revolved around "staging costs," which auditors for the inspector general's office said were mainly for equipment kept on standby before the camps were "operational."

Those costs should have been covered by Clearbrook's basic rate, auditors concluded. Wagner argued that the billings covered the expense of making the equipment available when it could have been used on another job.

The contract was so vaguely worded that it was unclear what standards Clearbrook was supposed to follow, a FEMA manager wrote in a June 2008 response to the audit. The agency found, however, that all but about $406,000 of the questioned billings were backed up by documentation and that the chances of recovering the rest were "doubtful." For that reason, FEMA did not plan to pursue a claim, he wrote.

That decision drew the ire of House Homeland Security Committee Chairman Bennie Thompson, D-Miss., but Clearbrook's position was backed by John Carnahan, a federal employee who initially headed the inspector general's team that audited Clearbrook.

"It was a horrible contract, it would never hold up in court, and I don't know whey they're pursuing it," Carnahan said in a Thursday phone interview, echoing previous comments.

In an e-mail, FEMA spokesman Clark Stevens said the agency "has substantially improved" its system for awarding and managing contracts.

Regarding the Clearbrook audit, Stevens said, FEMA will continue to work with the inspector general's office on reaching "appropriate outcomes."